Structure and Function

Membership

The Ghana Stock Exchange as a public company limited by guarantee has no owners or shareholders as such, but members are either corporate bodies or individuals.
There are three categories of members, namely Licensed Dealing Members (LDMs), Associate Members and Government Securities Dealers (PDs). An LDM is a corporate body licensed by the Exchange to deal in all securities. An Associate member is an individual or corporate body which has satisfied the Exchange’s membership requirements but is not licensed to deal in securities. A PD is a corporate body, which is approved by the Bank of Ghana and registered by the Exchange to deal only in government securities.

Regulatory Framework

GSE operates within a set of Rules, including membership, listing and trading. These are collectively referred to as the GSE Rule Book.

Membership Rules

These deal with the criteria for membership of the GSE, code of conduct or ethics for members, among others.

Listing Rules

These prescribe, among others, criteria for listing securities (local and external), continued obligations of the listed companies as well as Take-over and merger procedures.There are twenty one licensed stock broking firms which have set up systems for serving non-residents.

GSE Automated Trading (GATS) Rules

These govern electronic trading done by the brokers whether on  the Floor, from Dealers offices or through the secured internet.

Trading Method

GSE uses an electronic trading platform called the GSE Automated Trading System (GATS).

Trading Days

Trading takes place every working day.

Trading Hours

Pre-opening period: 9:30 to 10:00 hrs (GMT)
Market opens for continuous trading: 10.00 hrs to 15.00 hrs (GMT).

Clearing, Settlement and Depository Services

Settlement of trades is done electronically using a web based application. Settlement occurs three business days (T+3) after the trade date for Equity and two business days for Fixed Income. Trade settlement and share depository services are currently handled by the Central Securities Depository Company Limited (CSD), a subsidiary of the Bank of Ghana and Ghana Stock Exchange. The CSD System allows for mutual settlement of trade on T+0 or T+1 basis.  On settlement dates securities are moved automatically to client’s accounts in the depository system and the brokers settlement account debited.

Surveillance

The Securities and Exchange Commission (SEC) carries out regular inspection of Licensed Dealing Members’ operations and books. Brokers are also required to submit returns to GSE.  The Trading and Surveillance Unit within the Exchange carries out on-site surveillance activities for all our trading members and reports to the Risk Management Committee of Council.

Listing

GSE has two categories of listing. These are Official list and the Ghana Alternative Market (GAX). The GAX is essentially aimed at small and medium sized enterprises (SMEs).

Types of Securities that can be listed

•  Shares (preference or equities);
•  Debt in the form of corporate bonds (and notes), municipal bonds (and notes), & government bonds (and notes); and
•  Close-end unit trusts and mutual funds

Market Index

Starting from January 4, 2011, the GSE publishes two indices, namely the GSE Composite Index (GSE-CI) and the GSE Financial Stocks Index (GSE-FSI)

GSE Composite Index (GSE-CI)

The calculation of the GSE Composite Index (GSE-CI) is based on the volume weighted average closing price of all listed stocks. All ordinary shares listed on GSE are included in the GSE-CI at total market capitalization, with the exception of those of listed companies which have shares listed on other markets. The GSE-CI is a market capitalization weighted index, i.e. each constituent is given weight according to its market capitalization. The base date for the GSE-CI is December 31, 2010 and the base index value is 1000.

GSE Financial Stocks Index (GSE-FSI)

This index have its constituents as listed stocks from the financial sector including banking and insurance sector stocks. All ordinary shares of the financial stocks listed on GSE are included in the GSE-FSI at total market capitalization, except for those of stocks which are listed on other markets. The base date of GSE-FSI is also December 31, 2010 and the base index value is 1000.

Procedures For Non-Residents Investing Through The Stock Exchange

There are twenty one licensed stock broking firms which have set up systems for serving non-residents.

Custodial services for non-resident investors are provided by:

Investor Protection Provisions

The Exchange has various provisions in its rules which have been designed to protect the investor in addition to what the securities regulator(SEC) provides.
Under the SECURITIES INDUSTRY LAW PNDCL 333 (1993), as amended, the apex regulatory body in the securities market is the Securities and Exchange Commission and its functions include: maintaining surveillance over the securities business to ensure orderly, fair and equitable dealing in securities:

• Registering, licensing, authorizing, a Stock Exchange, investment advisors, securities dealers, etc.
• Protecting the integrity of the securities markets against any abuses arising from the practice of insider trading.